GST collection crosses Rs 1 lakh crore for second time since launch

Monthly goods and services tax (GST) collections breached the Rs 1-lakh-crore mark for the second time since its launch in July last year for September (collected in October), giving the Centre some hope that the wide revenue gap against its budget target could be narrowed in the second half of the fiscal.

As far as the cess is concerned, the collections have been slightly above the estimate of Rs 7,500 crore/month. Cess proceeds are meant for compensating the states for GST revenue deficit.

Monthly goods and services tax (GST) collections breached the Rs 1-lakh-crore mark for the second time since its launch in July last year for September (collected in October), giving the Centre some hope that the wide revenue gap against its budget target could be narrowed in the second half of the fiscal. While the latest figure is about 4% higher than the average of the first seven months of the fiscal and analysts said it may have reflected the tax’s stabilisation and increased compliance due to anti-evasion steps like e-way bill, the fact that September was the deadline for final settlement of last year’s tax liabilities might have also boosted collections. It remains to be seen if the latest spurt heralded a sustainable trend.

GST revenue had last crossed the Rs 1-lakh-crore threshold for March 2018 (collected in April), again a settlement month.
The government said: “The total gross GST revenue collected in October 2018 is Rs 1,00,710 crore of which central GST is Rs 16,464 crore, state GST is Rs 22,826 crore, IGST is Rs 53,419 crore (including Rs 26,908 crore collected on imports) and cess is Rs 8,000 crore (including Rs 955 crore collected on imports). The total number of GSTR 3B returns filed for September up to October 31, 2018, is 67.45 lakh.”
The monthly gross (pre-devolution) GST revenue (excluding cess) for the Centre to meet its budget estimate is a little over `54,000 crore. Against this, it got Rs 48,954 crore in October (after regular and provisional settlement of IGST) compared with an average of around Rs 39,000 crore in April-October. The revenue shortfall is not as much a concern for the states as the Centre as the former is protected by a 14% assured revenue growth under a compensation mechanism that has constitutional backing.

As far as the cess is concerned, the collections have been slightly above the estimate of Rs 7,500 crore/month. Cess proceeds are meant for compensating the states for GST revenue deficit.
“It appears that GST collections have turned the tide and the increased collections would be on account of the stabilisation of GST processes and the anti-evasion measures taken. The fact that September heralds the festive season has also helped in improving collections,” MS Mani, partner, Deloitte India, said.
“The states which achieved extraordinary growth in total taxes collected from the state assesses include Kerala (44%), Jharkhand (20%), Rajasthan (14%), Uttarakhand (13%) and Maharashtra (11%),” the government said.

“While it (revenue collected in October) is still slightly lower than the monthly average collection target for the year, the fact that the number is 12% more than the last year’s average monthly collection shows an overall increasing trend,” Pratik Jain, partner and leader, indirect tax at PwC India, said. He added that it was a good time for the government to consider rationalising the rates further by bringing many items from the 28% slab to 18%, such as ACs, cameras and other such items.
On the compliance front, nearly 67.45 lakh taxpayers filed GSTR 3B returns filed for September up to October 31, which is marginally higher than 67 lakh recorded last month.

Abhishek Jain, tax partner, EY India, said, “The thrust in collections and it being aligned to the forecast numbers is quite a welcome one and adds to the Diwali cheer. While a possible reason for an upsurge in September could be FY17-18 closing adjustments, this trend could be expected to continue with implementation of anti-evasion measures.”